Sides Split On Unemployment Compensation Proposal

House Republican leaders stand with business and labor representatives announcing working group to reach unemployment compensation plan in December 2016.

Dan Konik

Business and labor leaders both agree that something needs to be done to overhaul the fund Ohio uses to pay out jobless benefits. They want to avoid the crisis of 2008 when the state borrowed billions from the feds when the fund dried up. A new plan has been proposed but both sides seemed to be split on the bill.

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At this point it’s hard to tell where the different sides stand when it comes to Rep. Kirk Schuring’s unemployment compensation fund proposal.

Schuring had spent the first half of this year working with labor and business organizations to find a way to bring the fund to solvency, but that group never came up with a plan.

“So I took the liberty to take what I heard and digested that and I put my twist to some things in this bill that I introduced HB382 and HJR4 is my interpretation of what happened in that working group. It’s a combination of recommendations that were made by business and labor groups again with my twist to it.”

This move by Schuring throws the issue into the next step, the committee process.

His bill would raise the amount of money businesses would have to pay into the fund and require employees to pay 10% of the rate their employers pay. The proposal is a mixed bag of provisions all sides fought for and against. Schuring says that what you get in a compromise.

“It’s one of those things when you have to be the mediator often times if one side is happy and the other side is mad that means something’s bad but if both sides are just ambivalent or in some cases frustrated that might mean it’s pretty dog gone good.”

That’s the case for Lisa Hamler-Fugitt, who advocates for low-income workers and families. She’s happy that Schuring’s bill allows employees to collect unemployment for up to 24 weeks. And she's ok with the additional pay-in from employees. But she thinks the increase to employers’ rates could go up even higher. And she’s particularly worried about the exclusion of benefit for low-wage employees.

“To better reflect the current economy and labor market where so many of the jobs today are low-wage, part-time, temporary or contingent and for far too many Ohioans who lose their job through no fault of their own, they don’t have the qualifying weeks in to be able to receive unemployment.”

The liberal think tank Policy Matters Ohio is more critical of the unemployment compensation fund changes. Research Director Zach Schiller says the plan would freeze the maximum amount of benefits for nine years, which he sees as a cut to dependency benefits. Like Hamler-Fugitt, he also thinks employers should be paying more. But he’s not happy with 24 weeks of benefits and wants to keep it at 26 weeks.

“Ideally I would like to see the major benefit cuts stripped out of it and the vague language taken out of it so that it more resembles a bill that does justice to Ohio workers and allows for a solvent fund.”

But Greg Lawson with the conservative think tank The Buckeye Institute doesn’t like the tax on employees or the increase to the employer rate. And in fact, Lawson doesn’t like the current unemployment compensation system as a whole. Instead, he says Ohio should rebuild it using an individual account model where workers and business pay in and that account follows the worker wherever they go.

“Unfortunately we’re stuck tinkering around the edges with a big bureaucratic nightmare hoping that we can figure out how to make the money come in and go out the right way we’re going to probably be having this conversation again in the not too distant future and probably as soon as we have a recession and so if we don’t break that and change fundamentally what we’re doing I’ll be talking to you a lot more about it.”

Last December, Schuring stood with many representatives from labor and business who agreed the state needed to come up with a plan to bring Ohio’s fund to solvency. He says he introduced his bill as a starting point and expects all these groups to come back again to shape the plan into something that most can agree on.

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The state seems to be one step closer to a plan that would make changes to the way the state funds the program that pays benefits to unemployed workers. The next step is getting both labor and business to approve the idea.

There’s been a battle to change what employers pay into and what benefits workers get out of the state’s unemployment compensation fund. Now the bill to deal with that seems to be stalled at the Statehouse.